Fin24

Amsa in line for price-fixing fine

2012-04-02 12:29

Johannesburg - The Competition Commission said on Monday it has asked the competition court to penalise ArcelorMittal SA [JSE:ACL] and Evraz Highveld Steel and Vanadium for price-fixing.

The commission said in a statement it had asked for a fine of 10% of annual turnover for each company.

Africa’s largest steelmaker ArcelorMittal South Africa (Amsa) could face a fine of more than R3bn.

ArcelorMittal’s turnover for 2011 was R31.5bn while Highveld reported a turnover of R5.5bn for the year to end December 2011.

“Evidence before the commission indicates that the steel producers engaged in concerted practices or had understandings that Highveld would follow Mittal’s lead on the pricing mechanism and changes in pricing, including discounts and transport tariffs,” the regulator said.

The recommendation to the competition court comes four years after a complaint was filed with the authorities alleging that Mittal and Highveld adjusted their prices for steel products around the same time and with similar percentage increases.

ArcelorMittal spokesman Themba Hlengani said that the company would comment after consulting with its lawyers.

Shares of ArcelorMittal dropped more than 4.4% on Monday to R53.48, underperforming the JSE’s All Share index, which was 0.42% up on the day.

ArcelorMittal’s shares were also hurt by news that it had been excluded from the South African government’s preferential procurement programme, which is designed to benefit local manufacturers, and a downgrading by Barclays Capital.